Visa sued by Justice Department for Antitrust Violations over Debit Card Network

Visa is facing a class-action lawsuit from merchants accusing the company of anticompetitive behavior related to its debit network, filed in federal court on Oct. 1. This comes just over a week after the U.S. Department of Justice (DOJ) launched its own antitrust lawsuit against Visa.

The lawsuit, brought by All Wrapped Up Signs and Graphix, claims Visa's dominance in the debit network market has resulted in artificially high fees and monopolistic practices. It also alleges Visa penalized businesses that tried using alternative networks and paid off potential competitors to maintain control.

“Visa dominates the debit network market, and it has engaged in unlawful conduct that has artificially raised the price of those fees beyond what they would be in a more competitive market,” read the proposed class action suit, filed by advertising and marketing company All Wrapped Up Signs and Graphix. “Visa has monopolized the debit network on which debit card transactions run. It has entered into agreements to punish businesses that seek to use alternative networks or methods to process debit transactions.”

Visa has not yet responded to the suit. However, its General Counsel, Julie Rottenberg, dismissed the DOJ’s claims as "meritless," arguing that Visa is just one of many competitors in the expanding debit market.

"Anyone who has purchased something online or at a store knows there are countless companies offering new ways to pay for goods and services," Rottenberg said. "This lawsuit overlooks the reality that Visa is just one of many competitors in a growing debit market with successful new entrants."

Asked to respond, PAYMNTS CEO Karen Webster also criticized the DOJ’s action, pointing to the significant growth of payment innovations in recent years and citing the Durbin Amendment, which already regulates debit fees and requires multiple network options for merchants.